Florida Sinkhole Insurance Law Explained: What Sections 627.706–627.7074 Say

Published October 19, 2026 · By Orlando FL Foundation Repair

Florida's sinkhole insurance rules live in a short run of statutes, sections 627.706 through 627.7074. They are dense, and they are often summarized loosely. This article explains what the text says, quoting it where the wording matters, so homeowners in Orange, Seminole, Osceola and Lake counties can read their own policy with better questions in hand.

It does not tell anyone what a particular policy covers. Only the insurer and the policy can answer that.

Two different things: collapse coverage and sinkhole loss coverage

Section 627.706(1) sets up two tiers:

• Mandatory: "(a) Every insurer authorized to transact property insurance in this state must provide coverage for a catastrophic ground cover collapse."
• Optional: "(b) The insurer shall make available, for an appropriate additional premium, coverage for sinkhole losses." The statute says the insurer may require an inspection before offering it.

The statute also lets insurers restrict sinkhole coverage "to the principal building" (§627.706(1)(c)). Policies that exclude sinkhole loss must carry a notice in 14-point bold type that begins: "YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES…" (§627.706(3)).

The four conditions of a catastrophic ground cover collapse

Under §627.706(2)(a), a catastrophic ground cover collapse requires all four of these:

1. The abrupt collapse of the ground cover.
2. A depression in the ground cover "clearly visible to the naked eye."
3. Structural damage to the covered building, including the foundation.
4. The insured structure "being condemned and ordered to be vacated" by the governmental agency authorized to do so.

The same subsection then adds the sentence that answers most homeowners' first question: "Damage consisting merely of the settling or cracking of a foundation, structure, or building does not constitute a loss resulting from a catastrophic ground cover collapse."

What "sinkhole activity" and "structural damage" mean

The broader, optional tier uses its own definitions. "Sinkhole activity" means settlement "only if" it "results from contemporaneous movement or raveling of soils … into subterranean voids created by the effect of water on a limestone or similar rock formation" (§627.706(2)(i)).

"Structural damage" (§627.706(2)(k)) is defined by five technical tests tied to concrete standards (ACI 117-90 and ACI 318-95) and the Florida Building Code. They include floor deflection that leaves members "unfit for service," foundation deflection that overstresses primary members, a plumb line falling outside the middle third of the base, imminent collapse, and the Building Code's "substantial structural damage." Whether damage meets those tests is an engineering question.

Deductible options listed in the statute

As information only: §627.706(1) lists sinkhole deductible options of "1 percent, 2 percent, 5 percent, or 10 percent of the policy dwelling limits." Which option, if any, applies is set by each policy.

The 2-year notice rule

Section 627.706(5) says a sinkhole claim is barred unless notice is given to the insurer "within 2 years after the policyholder knew or reasonably should have known about the sinkhole loss."

Testing: who decides whether it is a sinkhole

When damage that may be sinkhole loss is reported under a policy with that coverage, the insurer must inspect, and §627.7072 requires it to engage a professional engineer or a professional geologist to conduct testing. The results go into a written report under §627.7073. The investigation provisions also say that if an insurer denies a claim without testing, the policyholder may demand testing in writing within 60 days and pays "50 percent of the actual costs … or $2,500, whichever is less," reimbursed if a sinkhole loss is certified.

The Florida Senate's 2010 staff report, citing the Office of Insurance Regulation, said the average cost among insurers to provide sinkhole tests was $9,466. It also described one test costing $16,574 that found improper construction, not a sinkhole.

Repairs follow the insurer's engineer

Section 627.707(5) controls how a covered sinkhole loss is repaired. The insurer "shall pay to stabilize the land and building and repair the foundation in accordance with the recommendations of the professional engineer," and "the insured must repair such damage or loss in accordance with the insurer's professional engineer's recommended repairs." Other parts of the subsection say:

• Actual cash value limit (a): the insurer may limit payment to actual cash value, "which does not include underpinning or grouting or any other repair technique performed below the existing foundation," until the policyholder contracts for the stabilization work.
• 90 days (b): the policyholder must enter into a repair contract within 90 days after coverage is confirmed, a period that is tolled during neutral evaluation.
• Paid as performed (c): the insurer pays "as the work is performed" and "may not require the policyholder to advance payment."
• 12 months (d): repairs are to be completed within 12 months of the contract, with exceptions.
• Direct payment (e): the insurer may pay the contractor directly with lienholder approval.

Grouting and underpinning are the methods the statute names. Our pages on sinkhole and subsidence repair and grouting versus piers describe how that work is done.

Neutral evaluation

Section 627.7074 creates a neutral evaluation process once a §627.7073 report exists. It is "nonbinding, but mandatory if requested by either party," the insurer pays the reasonable costs, and the evaluator must address causation, "all methods of stabilization and repair both above and below ground," and costs. The neutral evaluator is a professional engineer or professional geologist with training in alternative dispute resolution.

Recording and seller disclosure

Section 627.7073 deals with the paper trail:

• The engineer's and geologist's reports are presumed correct (§627.7073(1)(c)).
• For a paid claim, the insurer files the report with the county clerk for recording (§627.7073(2)). Recording is not a lien or title defect (§627.7073(2)(a)).
• Sellers must disclose a paid sinkhole claim and whether the proceeds were used for repairs (§627.7073(2)(c)). The statute's words: the seller "must disclose to the buyer of such property, before the closing, that a claim has been paid and whether or not the full amount of the proceeds was used to repair the sinkhole damage."
• After stabilization or foundation repairs for a verified sinkhole loss, the engineer who monitored the repairs issues a report certifying they were properly performed, and it is filed with the county clerk for recording (§627.7073(3)).

Our article on selling a house with a sinkhole history covers the disclosure side in more depth.

The 2011 reforms (SB 408)

The statute history notes show that sections 627.706, 627.707, 627.7073 and 627.7074 were amended by chapter 2011-39, Laws of Florida (CS/CS/CS/SB 408). Secondary summaries we could not confirm against the bill text credit that act with creating the five-part definition of "structural damage" and with the 2-year notice rule. The sections were amended again in 2014, 2022 and 2023, so older articles may describe rules that have since changed.

Context: where Florida's sinkhole claims came from

The most-cited numbers predate the 2011 reforms. Florida Senate Interim Report 2011-104 (December 2010) tabulated 17,977 sinkhole claims statewide from 2006 to 2009. Hernando, Pasco and Hillsborough counties accounted for over 66 percent. Orange County had 396 claims over those four years, 2.2 percent of the state total. The same report said the average paid claim in the regulator's sample rose from $40,218 to $62,628, and that geologists and engineers estimated stabilizing an average $150,000 home at about $75,000 by grouting or about $35,000 by underpinning. These are 2010-era figures.

For how engineers tell ordinary settlement from sinkhole activity, see settlement vs. sinkhole in Central Florida. Homeowners who want repair quotes once an engineer's scope exists can request free quotes; Orlando FL Foundation Repair connects Orlando-area homeowners with independent Florida-licensed contractors, and the contractor you choose quotes, contracts and does the work.

This is general information, not legal or insurance advice. Ask your insurer what your policy covers.

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